Item 1.01 Entry into a Material Definitive Agreement
Securities Purchase Agreement with
On
Closings. Under the Agreement, the purchase price per share of Series C
Convertible Preferred Stock is
"Event of Default" as defined in the Agreement means any of the following
events: (i) the suspension, cessation from trading or delisting of the Company's
Common Stock on the Principal Market for a period of two (2) consecutive trading
days or more; (ii) the failure by the Company to timely comply with the
reporting requirements of the Exchange Act (including applicable extension
periods); (iii) the failure for any reason by the Company to issue Commitment
Shares, Dividends or Conversion Shares to the Purchaser within three trading
days; (iv) the Company breaches any representation, warranty, covenant or other
term of condition contained in the definitive agreements between the parties;
(v) the Company files for Bankruptcy or receivership or any money judgment writ,
liquidation or a similar process is entered by or filed against the Company for
more than
Indemnification of Purchaser. The Company has agreed to indemnify and hold the
Purchaser and its respective directors, officers, shareholders, members,
partners, employees and agents, each Person who controls the Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, shareholders, agents, members, partners or
employees harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, incurred by reason of or relating to
(a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in the Agreement or in the other Transaction
Documents or (b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such
Listing. The Company has agreed to promptly secure and maintain the listing of its common stock upon each national securities exchange or automated quotation system, if any, upon which shares of common stock are then listed (subject to official notice of issuance).
Registration Rights. The Agreement provides that the Company shall file a
Registration Statement with the
2
Item 3.02. Unregistered Sale of
The following table sets forth the sales of unregistered securities since the Company's last report filed under this item.
Total Offering Principal Price/ Underwriting
Date Title and Amount (1) Purchaser Underwriter Discounts
$750,000 /NA C Preferred Stock. NY, Inc. January 22, 2021 2,000,000 shares of BHP Capital NA$150,000 /NA common stock issued NY, Inc. as commitment shares
(1) The issuances of securities to lenders and investors are viewed by the
Company as exempt from registration under the Securities Act of 1933, as amended
("Securities Act"), alternatively, as transactions either not involving any
public offering, or as exempt under the provisions of Regulation D promulgated
by the
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Effective
Terms of the Series C Convertible Preferred Stock
The number of authorized shares of the Series C Convertible Preferred Stock (the
"Series C Preferred Stock") authorized pursuant to the Certificate of
Designation, as amended and filed
The holders of the Series C Preferred Stock shall have the right to vote together with holders of Common Stock, on an as "converted basis", on any matter that the Company's shareholders may be entitled to vote on, either by written consent or by proxy. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Series C Preferred Stock are entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series C Preferred Stock an amount equal to the Stated Value per share for each share of Series C Preferred Stock held, and all other amounts in respect thereof then due and payable prior to any distribution or payment shall be made to the holders of any junior securities. The Company is required to reserve for conversions 250% of the number of shares of common stock into which the Series C Preferred Stock is initially convertible. If the Company fails to deliver conversion shares, it is subject to penalties under the Certificate of Designation.
3
The Conversion Price for the Series C Preferred Stock is subject to customary adjustments for stock dividends, and splits and combinations of shares, rights offerings and Fundamental Transactions (as defined) with respect to the common stock, all a s provided in the Certificate of Designation.
The Company has the right to redeem all (but not less than all) shares of the Series C Preferred Stock issued and outstanding at any time after the Original Issue Date, upon five (5) business days' notice, at a redemption price per Series C Preferred Stock then issued and outstanding (the "Corporation Redemption Price"), equal to the product of (i) the Premium Rate multiplied by (ii) the sum of (x) the Stated Value, (y) all accrued but unpaid dividends, and (z) all other amount due to the Holder pursuant to the Certificate of Designation and/or any Transaction Document including, but not limited to Late Fees, liquidated damages and the legal fees and expenses of the Holder's counsel relating to the Certification of Designation, any other Transaction Document and/or the transactions contemplated thereunder. "Premium Rate" means (a) 1.10 if all of the Series C Preferred Stock is redeemed within ninety (90) calendar days from the issuance date thereof; (b) 1.15 if all of the Series C Preferred Stock is redeemed after ninety (90) calendar days and within one hundred twenty (120) calendar days from the issuance date thereof; (c) 1.20 if all of the Series C Preferred Stock is redeemed after one hundred twenty (120) calendar days and within one hundred eighty (180) calendar days from the issuance date thereof; and (iv) each share of Series C Preferred Stock shall be redeemed on the Date that is one (1) calendar year from the date of its issuance (redemption after one (1) year, a Mandatory Redemption). If an Event of Default has existed at any time while the Series C Preferred Stock is outstanding, the Holder has the right to reject any Corporation Redemption request. In such event, the Company is required to transmit the Corporation Redemption Notice and Holder must provide its approval within five (5) calendar days. Absent express approval of the Holder within five (5) calendar days of the receipt of the Corporation Redemption Notice, such Corporation Redemption Notice will be deemed to have been rejected by the Holder.
"Permitted Liens" under the Certificate of Designation means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent; (iii) any Lien created by operation of law, such as materialmen's liens, mechanics' liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings; (iv) Liens (a) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, and (b) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment; and (v) any Liens for Permitted Indebtedness set forth in (i) and (ii) of the definition of Permitted Indebtedness provided as to "(ii)" of Permitted Indebtedness such Liens were in existence and not amended, supplemented and/or modified since the original issuance date any such Indebtedness was incurred.
THE FOREGOING SUMMARY DISCUSSION OF THE TERMS OF THE SECURITIES PURCHASE AGREEMENT AND CERTIFICATE OF DESIGNATION OF THE SERIES C PREFERED STOCK IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE TERMS SET FORTH IN SUCH AGREEMENT AND CERTIFICATE COPIES OF WHICH ARE FILED AS EXHIBITS TO THIS CURRENT REPORT. DEFINED TERMS USED IN THE DESCRIPTIONS OF THE SERIES C PREFERRED STOCK AND THE PUTCHASE AGREEMENT IN THIS CURRENT REPORT SHALL HAVE THE RESPECTIVE MEANINGS PROVIDED IN THOSE DOCUMENTS, AS APPLICABLE, UNLESS SPECIFICALLY DEFINED ABOVE IN THIS REPORT.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description of Exhibit 10.36 Securities Purchase Agreement, dated as ofJanuary 14, 2021 , between the Company andBHP Capital NY, Inc. , LLC. 3.1(j) Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, filedJanuary 20, 2021 , as amendedJanuary 21, 2021 . 4
© Edgar Online, source